Grab says Uber deal driven independently by firms, has SoftBank support

Michele Moreno
March 28, 2018

As per a deal, Grab is taking over the operations of Uber in the region, with the US-based company to receive a 27.5 per cent stake in the business in return. The deal was made over the weekend.

The move is a major victory for Japanese holding company SoftBank, which is the biggest shareholder of both ride-hailing companies.

Although Uber had been denying that it would be pulling out of Southeast Asia, its fight with rival Grab has finally come to an end. Privacy Commissioner Raymund Enriquez Liboro said Grab Philippines has assured them "there will be no sharing of any user data between Uber and Grab". The four companies provide about 45 million rides a day, according to SoftBank presentation material in February.

Uber, which is preparing for a potential initial public offering in 2019, lost $4.5 billion previous year and is facing fierce competition at home in the United States and across Asia, as well as a regulatory crackdown in Europe. In 2015, Uber announced an investment of Dollars 1 billion in India to expand its services here.

After just five years and an alleged $200 million per year investment in breaking into the region, the move feels a lot like Uber's withdrawal from both China in August 2016 and Russian Federation in July 2017 after failing to beat out local players, China's Didi and Russia's Yandex, in each.

Uber CEO Dara Khosrowshahi, on his recent visit to India had said, India is a core market for the company.

Go-Jek has become a dominant player and powerful rival in Indonesia, the region's biggest economy, and it has rapidly expanded beyond ride-hailing to digital payments, food delivery and on-demand cleaning and massage. Despite giving up in Southeast Asia, Khosrowshahi signaled during a trip through Asia last month that he's committed to other key markets including Japan and India. But its latest exit suggests Uber is more than ever dependent on its home market of North America, not unlike Khosrowshahi's previous US -centric employer, Expedia Inc. Last year, Uber merged in Russian Federation with the taxi-hailing app of internet giant Yandex. Grab was last valued at $6 billion after a financing round in July. Today, with more than 86 million mobile app downloads, it offers a wide range of ride-hailing services in 191 cities across Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar and Cambodia.

"Higher fares may allow for more local competition to arrive", he said, adding that switching costs between the two apps are low for drivers and customers.

"It will help us double down on our plans for growth".

Other reports by Insurance News

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